USI Insurance Services has emerged as the winner in the race to Wells Fargo’s insurance business, seemingly beating out Alliant for the deal.
The deal was confirmed this morning by USI. As recently as yesterday industry figures familiar with the deal were predicting Alliant would seal the purchase.
USI, a large brokerage, “has entered into an agreement with Wells Fargo & Company to purchase Wells Fargo Insurance Services USA, which includes its insurance brokerage and consulting, employee benefits and property and casualty national practices, along with safehold special risk, small business insurance, student insurance, individual health and private risk management insurance business lines,” a statement this morning read.
Terms of the transaction were not disclosed. The deal is expected to be finalized in Q4 this year.
Michael J. Sicard, chairman and CEO of USI, said the deal was a “transformational transaction” for both parties.
“We share a common culture and values, including a focus on delivering a truly different and better set of solutions with bottom line impact,” he said. “Together, we bring a full suite of distinctive property and casualty, employee benefit, personal risk and retirement solutions, to middle market, large corporate, small business and individuals.”
Headquartered in Valhalla, New York, USI has over $1.0 billion in revenue and employs more than 4,400 staff in 140 local offices, across every state.
Just yesterday, according to a Bloomberg report referencing “people familiar with the matter,” Alliant had been the front-runner to close out the Wells Fargo deal.
Wells Fargo, the largest US retail bank by branch count, is selling its insurance division as part of a strategy to boost profit by exiting some businesses. It’s also looking to take advantage of a takeover boom in the insurance brokerage market driven by private equity firms angling to consolidate the fragmented sector.
KKR & Co. and a Canadian pension fund, Caisse de Depot et Placement du Quebec, agreed in March to buy USI Insurance in a deal that valued the insurer at $4.3 billion, including debt.
Wells Fargo Insurance Services was the seventh-largest insurance broker in the US at the end of 2015, as measured by revenue. USI ranked ninth and Alliant was 12th.
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